African startups raised $239m in July 2022, a 43.77% decline from June

Omoleye Omoruyi
Africa’s tech ecosystem had the lowest funding this year in July 2022…
African startups raise over $200 million in July 2022
African startups raise over $200 million in July 2022

7,651 deals, making up $108.5 billion in funding, took place last quarter — marking the biggest quarterly percentage drop in deals (and the second-largest drop in funding) in a decade. Q1 2022 was a tough quarter globally, yet investments in African startups grew +150% YoY in Q1 2022.

The only region that was growing faster than Africa YoY in Q2, Q3 and Q4 2021 was Latin America. So, it was the fourth consecutive quarter of 3-digit growth for Africa.

Highlights of global venture funding (report from CB Insights):

Highlights of global venture funding (report from CB Insights):
Image: CB Insights
  • Funding dropped across all major regions in Q2 2022, including a 25% QoQ in the US and Asia. While the US drove almost half of all funding ($52.9 billion), Q2 2022 marked its lowest funding amount since 2020. In contrast, Europe-based startups only saw a 13% dip in total funding Q-o-Q.
  • $100 million+ mega-round funding reached $50.5 billion across 250 deals in Q2’22, marking a 31% fall Q-o-Q. The mega-round activity also experienced a 31% decline, hitting its lowest level since 2020.
  • Q2’22 saw the birth of 85 new unicorns globally — a 6-quarter low and a sharp decrease from the 148 unicorns born a year ago in Q2’21.
  • Tiger Global Management was the most active investor for the third straight quarter in Q2’22. It invested in 86 companies. However, that number marked a decline
  • from 120 in Q1’22. In fact, the top 10 investors in Q2’22 collectively invested in 553 companies — a 22% drop in company count from the previous quarter.
  • Retail tech funding dropped 43% QoQ to hit $13.2 billion, marking a 7-quarter low for the sector. Other categories also saw a significant slowdown in quarterly funding. Fintech saw a 33% QoQ decline in funding, while digital health funding fell by 32% to $7.1 billion, an 8-quarter low.
Highlights of global venture funding (report from CB Insights):
Image: CB Insights

African startups in July

Africa’s tech ecosystem had the lowest funding this year in July 2022.

African startups raised $239,706,000 (fully disclosed), according to TechCabal – the lowest amount raised so far in a month by African startups. It is 43.77% decrease from June’s $426,280,000. 

Here is a brief breakdown:

Fintech startups raised $110,040,000 (45.9%), energytech startups raised $66,046,000 (27.6%), and media/telecoms startups raised $25,670,000 (10.7%). In total (undisclosed inclusive), 26 African startups raised $444.23 million, excluding the $298 million raised by South Africa’s MetroFibre from Standard Chartered Bank.

Funding went to seven North African startups, five startups in Southern Africa, three in East Africa, and 11 in West Africa. Below is a brief breakdown by region:

West Africa:

A total of $123.23 million was raised in West Africa, excluding undisclosed funding from Ghanaian e-mobility startup, Solar Taxi and Senegalese fintech, Monetic Group. Senegalese Wave secured the highest funding in West Africa ($91.5 million).

Out of the 11 startups that raised funds in this region, seven are Nigerian. Winich ($790,000), CreditCheck ($240,000), Zazuu ($2 million), Swipe ($500,000), Moove ($20 million), Scorefam ($25 million), Ubenwa ($2.5 million), all 58.6% of West Africa’s total funding.

South Africa:

All five startups in this region are South African, raising 100% of the funding. DigsConnect secured an undisclosed amount.

The South African digital student accommodation platform closed a pre-Series A round of funding to spearhead its international growth, focusing on helping African students in the UK and the US secure more affordable, convenient, and safe housing. 

H2O Securities secured $150 million, Michanic ($400,000), Qwili ($1.2 million), and Cassava ($50 million).

North Africa:

Three out of the funded startups are Egyptian, two from Morocco, while Sudan and Tunisia had one each.

Egypt’s Stllr Network and Tunisia’s Paymee secured undisclosed funding. Others include Aza Petrosolutions ($250,000), Cartona ($12 million), Sudan’s Bloom ($6.5 million), The Fashion Kingdom ($2.6 million) and Morroco’s Smartprof ($50,000).

“There is an untapped potential of teams in the marketing industry, but the best teams are formed on their own through the network. This model is the first of its kind in the world, and only in a community-based region like ours is it the best place to start. Thirty-four percent of all experts in the network come through referrals by someone already in the network. They can build and manage their own teams through Stllr’s technology. It’s social. We doubled our talent pool in 2022 just through the network,”

– Stllr Network CEO Nouran Ghannam said in a post

From January to June, Egypt has dominated North Africa’s fundraising scene and July isn’t different following 86.4% of the month’s total funding.

East Africa:

July, in East Africa, saw three startups raise funds. CrossBoundary ($40 million), Solar Panda ($8 million), and d.light ($50 million).

Central Africa has no record of funding in July 2022.

Kenya, Nigeria, Egypt, and South Africa dominate their respective regions, and fintech startups have continued to lead the way.

Summary of top raises by African startups in July:

  • Senegal-based fintech startup, Wave, founded by Drew Durbin and Lincoln Quirk in 2018, raised a syndicated loan of $91.5 million from International Finance Corporation (IFC), Blue Orchard, Symbiotics, responsAbility, and Lendable.
  • d.light secured a $50 million balance sheet debt facility from a consortium of lenders, according to an announcement in July.
  • CrossBoundary Energy (CBE) announced a $40 million equity investment from Norfund and KLP.
  • Blockchain sports gaming platform, Scorefam, partnered with Bahamas-based investment firm GEM Digital Limited, as it secured $25 million from the firm to provide the financial flexibility needed for the execution of its strategic development plans.
  • Moove, which raised $10 million in debt financing in February and mega funding of $105 million a month before, secured $20 million in debt funding from British International Investment (BII), the UK government’s Development Finance Institution (DFI).
African startups raised over $174 million in July 2022

Africa is defying a global downturn

The Inflection Point forecasts that the size of Africa’s digital economy will grow sixfold, to $712 billion by 2050, and insists that the continent “has barely scratched the surface of its potential relative to other regions.” 

Endeavor’s premise, according to an article by Yemi Adegoke, is based on rates of GDP and consumer spending growth in African countries, the acceleration in the use of digital services in many countries during the Covid-19 pandemic, and the growing digitally savvy young populations with an increased interest in tech jobs.

We don’t expect an economic downturn to dry up investments completely. We believe funding would be available for good companies solving real problems.

Tosin Faniro-Dada, Endeavor Nigeria’s managing director

Bloomberg predicts that if this funding trend continues for African startups, the continent may beat last year’s record of $5 billion – predicted to reach $7 billion.

The media platform also reports that despite this positive report, the amount of money African firms receive is “minuscule when compared with countries such as the US, where companies raised $123 billion in the first six months of the year, 11% less than last year.”

Africa has potential, and it is argued that the surface has only been reached, not scratched. If tech innovators focus on solving the problems, we are looking at a growth trajectory high enough to rub shoulders with other continents and a funding growth that may exceed expectations.


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